How to create an income from your pension

How to create an income from your pension

Creating an income from a pension pot is an easy and popular thing to do. It's done by purchasing an annuity or income drawdown policy.

An annuity is bought with some or all of your pension pot. Afterwards, you'll receive a regular income from the annuity provider, with the amount depending on the quoted annuity rate given to you (the rate is dependent on your age, health and other factors).

Income drawdown policies use pension pot money to purchase investments, thus providing policy holders with an income. Money can also sometimes be taken out of these accounts at any time to support the holder's lifestyle.

Return to Retirement Planning home.